ANC set to lose majority in pivotal vote

South African’s governing African National Congress appears set to lose majority control in the country’s most seismic political transition since the end of the apartheid.

Early indications from 17.54% of polls show the ANC gaining 42.95% of support, with the Democratic Alliance wresting 25.24% of votes, and the Marxist Economic Freedom Fighters in tow with 8.6%.

Reuters reported that the country’s Council for Scientific and Industrial Research separately predicted that the ANC will gain roughly 42% of the national vote, off projections made when 8.5% of polling stations had recorded results.

Provisional results are still subject to change.

The loss of parliamentary majority would propel the ANC to seek an alliance with one or more parties to govern, stoking uncertainty over the country’s political direction.

The news may impact investors, after the ANC — the party of Nelson Mandela, emblematic of the struggle for liberation from white minority rule — centered its economic policy on inclusivity and lifting living standards for the disadvantaged. Despite these efforts, the World Bank in 2022 dubbed South Africa “the most unequal country in the world,” while systemic issues such as chronic blackouts, unemployment of almost 33% and high crime rates continue to haunt the country of over 62 million people.

The International Monetary Fund projects that South Africa’s gross domestic product will climb by 0.9% in 2024.

The ANC’s prominence has been on the decline, with Statista data showing the party clinched a majority of 57.5% in the previous vote of 2019 — its weakest result since the introduction of South Africa’s first democratic election in 1994.

“Under my leadership the ANC ran a formidable and clean campaign with our volunteers covering the length and breadth of our country. The democratic process is going to emerge victorious,” ANC leader and South Africa’s incumbent President Cyril Ramaphosa, 71, said Wednesday on social media.

Ramaphosa, who took the presidency’s mantle in 2018, helped found the National Union of Mineworkers in 1982 and led one of the largest strike actions in the country’s history. He seeks a second mandate, after surviving a scandal involving the theft of more than half a million U.S. dollars and being cleared of wrongdoing in 2023, according to the Associated Press.

The U.S. dollar was up 1.31% against the South African rand at 8:30 a.m. London time, following the report. The main Johannesburg stock index was down 1.8% on Thursday morning.